Perfect Competition In Real Life | Economics IRL

Is perfect competition an economics fantasy, or can we observe the market equilibrium in real life? Economics is often critiqued for its unrealistic portrayal of the world, but the criticism might be unfair. After all, economists use lots of models to describe the world, and it's only after you find a situation that matches the assumptions that you can apply economic models. For instance, you wouldn't apply a model of perfect competition to the smartphone market because Apple has a monopoly over the iPhone and Samsung has a monopoly over the Fold. In this video, we look at the assumptions of perfect competition and see if the market equilibrium--low prices everywhere--holds.

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